SEOUL: South Korean companies are formulating strategies to minimise the impact of the United States’ decision to impose high tariffs on goods imported from Canada and Mexico, officials said.
On Saturday, US President Donald Trump announced a 25 per cent tariff on imports from Canada and Mexico, along with a 10 per cent tariff on goods from China.
Trump has also pledged to impose additional tariffs on energy, semiconductors, and other imports in the near future.
Samsung Electronics Co, LG Electronics Inc and other major South Korean firms with production bases in these countries have been preparing for such tariffs, which have been anticipated since Trump won the presidential election last year.
LG Electronics is reportedly considering manufacturing its refrigerators and televisions at its existing washing machine and dryer plant in Tennessee as part of efforts to circumvent the tariffs, according to company officials.
Currently, the company operates manufacturing plants for televisions, refrigerators, and vehicle components in Mexico.
Last month, LG Electronics’ Chief Financial Officer (CFO), Kim Chang Tae, stated during an earnings call that the company would “actively” consider relocating production facilities and adjusting production capacities if changes in US trade policies necessitate a supply chain shift.
Samsung Electronics CFO Park Soon Cheol has also indicated that the company is assessing “potential opportunities and risks arising from the shifting geopolitical landscape, including the US presidential election.”
Samsung Electronics currently operates manufacturing plants for televisions, refrigerators, and washing machines in Mexico.
The battery and automobile industries are also closely monitoring the evolving trade landscape in North America, according to industry officials.
Leading battery manufacturer LG Energy Solution Ltd operates a joint venture with Stellantis N.V. in Canada for battery module production.
Meanwhile, POSCO Future M Co, a smaller competitor, is constructing a joint venture in Canada with US automotive giant General Motors Co to manufacture cathode materials, a key component in electric vehicle (EV) batteries.
South Korean automotive giant Hyundai Motor Group is reportedly reviewing plans to redirect vehicle exports from Mexico to Canada, South America, or Europe, as well as considering relocating its manufacturing plant in Mexico to the US.
During a conference call last month, a Kia Corp strategic investment official stated that the company was evaluating adjustments to its supply chain from its Mexican manufacturing facility in response to the US tariffs. – BERNAMA
